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Apex court declines Chanakya cinema's plea

IANS [Friday, November 11, 2005]

The Supreme Court Friday refused to stay a Delhi High Court judgement directing Aggarwal and Modi Enterprises to vacate the Chanakya cinema complex in Chanakyapuri that was leased to it in 1970.

A bench of Justice Arijit Pasayat and Justice S.H. Kapadia declined the stay after senior counsel Ashok Desai appearing for the company did not accept the formula suggested by the court.

The bench issued notice to the New Delhi Municipal Council (NDMC), which had leased out the property, and asked the parties to complete their pleadings by Nov 25 and directed listing of the case for further hearing on Nov 28.

Desai said the company was paying Rs.2.5 million ($54,800) as licence fee per annum to the NDMC. When the NDMC said that it wanted to construct a multiplex there, the company had offered to pay Rs.18 million per year to NDMC as against its estimated revenue of around Rs.20 million.

He said since the company had earned goodwill, it would accept any nominal increase in the rent to be decided by a committee.

Senior counsel Harish Salve, appearing for the NDMC, said there was a plan to construct a multiplex in place of the complex before the 2010 Commonwealth Games and a global tender had to be floated for that purpose.

He said the company had been raising various legal disputes since 2001 to prevent the NDMC from implementing its proposal.

Salve added that the company had to pay Rs.230 million as arrears. Disputing the claim, Desai said there were no arrears.

At this juncture, the bench suggested to Desai to pay Rs.50 million to the NDMC towards loss of revenue it had suffered since 2001. Desai said it was not possible to pay the amount as suggested by the court. The bench also suggested that the company pay Rs.1.5 million as licence fee for three months.

In the meanwhile, the NDMC could float the global tender and process the same but it should not finalize it, the bench suggested.

The High Court had asked the company on Aug 30 to hand over the possession of the premises to the NDMC by Nov 30.

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